Meeting low expectationsVista has been a commercial success and a failure of expectations. Commercially, uptake has improved nicely in recent months. Researcher Net Applications found that Vista's share of PCs accessing the Web increased by about a percentage point in October. Mac OS X's share declined slightly during the same period. (However, the Mac now accounts for roughly 8% of the market -- well above the 5% share it had not long ago.)

That said, Vista's failure to meet inflated expectations -- a failure that has been well-documented and has spurred brilliant satire -- appears to be almost entirely the result of infighting at Microsoft, trade magazine Computerworld reports.

Court documents show that Ballmer capitulated on specifications for what would qualify as a "Vista Capable" PC, an important designation around which Microsoft would craft a marketing campaign. Initially, Computerworld reports, Mr. Softy held the line -- demanding that "Vista Capable" hardware include advanced graphics chips. So Hewlett-Packard (NYSE: HPQ) prepared as Dell (Nasdaq: DELL) resisted.

But then Intel (Nasdaq: INTC) complained. The line disappeared shortly thereafter, emails show.

HP's management and some of Microsoft's top engineers fumed at the decision, including Jim Allchin, who led the development of Vista at the executive ranks. "I am beyond being upset here," Allchin wrote to Ballmer in an email released by the court. "This was totally mismanaged by Intel and Microsoft. What a mess. Now we have an upset partner, Microsoft's destroyed credibility, as well as my own credibility shot."

Allchin retired from Microsoft on the day of Vista's release. Dell has chosen to allow some PC customers to choose Windows XP over Vista. And Intel -- the longtime partner to which Mr. Softy yielded -- has refused to upgrade its own PCs to Vista.

Injury, meet insult.

Where have all the innovators gone?What's so awful about this story is that it isn't surprising to investors. Not our 120,000-strong Motley Fool CAPS community, anyway:

"The giant is in a long, slow decline," wrote CAPS All-Star brianlucas over the weekend. "It is huge and well-entrenched, so it will take a long time to fall and will use every tool at its disposal to hang on. However, their flagship products like Vista are failing and their monopoly, especially in Europe, is being challenged legally and also in the marketplace as alternatives are becoming more and more attractive and practical. I'm betting on Microsoft's decline in the long term."

To be fair, every firm capitulates from time to time when it comes to technology -- even Apple (Nasdaq: AAPL) . For example, you can't replace your iPod battery without a factory refit. Birthing technology often creates awful acts of capitulation that squeeze users.

If Apple isn't as subject to this problem as others, it's only because of CEO Steve Jobs's desire to keep his company vertically integrated. Intel is a partner for microprocessors, sure, but it's the iEmpire that controls design and assembly of both OS X and the hardware that runs it. Jobs can therefore make, and enforce, impossible design demands.

Microsoft, on the other hand, provides specs and recommendations, but it's up to the PC manufacturers to build machines that make its software sing. Coordination is key -- because when you have multiple break points, something usually breaks.

Which brings me back to Vista. Today, the OS is catching on. But, at release, it offered more problems than solutions for far too many. That misstep may help to explain why, thanks to improved Mac and iPhone sales, one analyst thinks that Apple is about to enjoy the mother of all earnings blowouts.

I've got my "i" on you, Mr. SoftyThere's a lot to like about Microsoft at these levels. Windows is still the world's dominant operating system, Google's (Nasdaq: GOOG) Docs has yet to displace Office as the top software productivity suite, and its partnership with Netflix (Nasdaq: NFLX) could transform the Xbox into a leading digital entertainment hub. Mr. Softy, in some ways, is a tech hardbody.

But Vista's poor rollout, and errors like it, reveal stretch marks. That's a problem. Developers have more platform choices than they used to. And they don't always choose Microsoft. Rather, they're writing for the iPhone, or for cloud computing environments, or for Google. Give them long enough, and they'll find ways to produce software that will, at the very least, seriously damage Windows and Office.

Microsoft is cheap. Maybe it's for a good reason.

Apple and Netflix areStock Advisorselections. Dell, Intel, and Microsoft areInside Valuepicks. The Motley Fool also owns shares and covered calls in Intel. Google is aRule Breakersrecommendation. Try any of these market-beating services free for 30 days. There's no obligation to subscribe.

Fool contributorTim Beyershad stock and options positions in Apple and Google at the time of publication. The Motley Fool has a tech-tasticdisclosure policy.

Comments from our Foolish Readers

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At least you're not talking about me. My name is ends with an "s." Tough break for that other guy. Nevertheless, moodupani, please tell us why this article is unfair -- bearing in mind that *everything* we write here is analysis and opinion. Straight reporting is for The Associated Press. Thanks much, Tim (TMFMileHigh)

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Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At Fool.com, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics. Find him online at timbeyers.me or send email to tbeyers@fool.com. For more insights, follow Tim on Google+ and Twitter.